Influences on Strategic Decision Effectiveness

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Strategic Management Journal
Strat. Mgmt. J., 28: 431–453 (2007) Published online 5 February 2007 in Wiley InterScience (www.interscience.wiley.com) DOI: 10.1002/smj.597 Received 21 July 2004; Final revision received 3 August 2006

INFLUENCES ON STRATEGIC DECISION EFFECTIVENESS: DEVELOPMENT AND TEST OF AN INTEGRATIVE MODEL SAID ELBANNA1 and JOHN CHILD2 *
College of Business and Economics, United Arab Emirates University, Al Ain, United Arab Emirates 2 Birmingham Business School, University of Birmingham, Birmingham, U.K. 1

This paper draws upon three broad perspectives on the strategic decision-making process in order to develop a more completely specified model of strategic decision effectiveness in a different context, namely Egypt. The key variables in this model consist of three strategic decisionmaking process dimensions (rationality, intuition, and political behavior); seven moderating variables concerning decision-specific, environmental, and organizational factors; and strategic decision effectiveness as an outcome variable. A two-stage study was conducted in which the first stage provided exploratory insights and the second stage investigated hypotheses on the impact of strategic decision-making process dimensions on strategic decision effectiveness and the moderating role of broader contextual variables. The second-stage study produced three major findings: (1) both rational and political processes appear to have more influence on strategic decision effectiveness than does intuition; (2) strategic decision effectiveness is both process- and context-specific; and (3) certain results support the ‘culture-free’ argument, while others support the ‘culture-specific’ argument. Copyright  2007 John Wiley & Sons, Ltd.

INTRODUCTION
Previous research into the strategic decisionmaking process has produced some inconsistent findings. This may be due to the application of oversimplified models to a complex phenomenon. Therefore, several scholars have advocated the desirability of combining different perspectives of decision making when investigating the strategic decision-making process (e.g., Bateman and Zeithaml, 1989; Bryson and Bromiley, 1993; Elbanna, 2006; Schneider and Meyer, 1991). Hough and White (2003), for example, stress that integrative models of the strategic decisionmaking process should be used to examine Keywords: contextual variables; decision effectiveness; intuition; political behavior; rationality; strategic decision *Correspondence to: John Child, Birmingham Business School, University of Birmingham, Edgbaston, Birmingham B15 2TT, U.K. E-mail: J.Child@bham.ac.uk

simultaneously the effects of context, managerial actions, and managers’ cognitions. Hitt and Tyler (1991) support the need to integrate the different perspectives of strategic decision making, adding that such integration would provide a better understanding of strategic decision-making processes. It has been argued that account should be taken of both contingency variables and environmental characteristics when examining the effects of process variables on strategic decision-making effectiveness. Hart and Banbury (1994: 256), for example, state that research into the link between process and organizational outcomes ‘must examine or control for key contingency factors.’ They report that empirical work on the association between the strategic decision process and organizational outcomes has taken a contingency perspective since the early studies of Miller and Friesen (1983) and Fredrickson and

Copyright  2007 John Wiley & Sons, Ltd.

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S. Elbanna and J. Child
The investigation reported here was also informed by a further consideration. While the strategic decision-making process appears to differ between different countries and there is little evidence of universalism (Wilson, 2003), research on this topic is quite limited outside the United States and the United Kingdom. This reflects ‘the overwhelming geographical bias’ of work...
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